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Forward looking risk management is not easy

Everything has some form of risk, the problem is that it is in every aspects of corporate business. There needs to be an overall assessment of the level of risk involved. The problem is getting more complex because:

  • Most industries and organizations are going through a period of rapid change
  • New competitors with disruptive business models are emerging
  • Customer  demographics and dynamics are changing
  • Technological advancements are bringing about paradigm shifts in business fundamentals
  • The regulatory landscape, which is an exponent of many of the above factors, is also changing to remain relevant.

Practical commonsense approach

Companies need a practical common sense approach. MetricStream have just released an insight paper  “Forward-Looking Risk Management – Navigating an Ever-Changing Business Landscape,” which contains two really useful concept diagrams.

What is Forward-Looking Risk Management and asking the right questions 

Source & Copyright©2018 - MetricStream

Which shows that organisations need the ability to manage both existing and emerging risks, and helps the business adapt quickly to unwanted events or crises, so they need both Descriptive and Predictive analytics.

And that to really build a stong risk management programme organisations need a strategic initiative that enhances performance and the core values of the organisation:

Source & Copyright©2018 - MetricStream

Not surprisingly MetricStream, who supply tools and services to manage and control risk, argue that companies should leverage technology to build a strong risk management programme, “Having the right tools and capabilities to prepare and respond appropriately to emerging, unforeseen risks has also become crucial in an ever-changing business environment.”

The overall risk management question 

Does your organisation bring all your risk management together in an integrate forward looking risk management programme that shows where all your risks are at any point in time? Just focusing on financial/treasury risk is no longer enough, other risks can, and probably are, much bigger.


This item appears in the following sections:
Risk Management
ERM - Enterprise Risk Management
% Rate Hedging & Risk Management
Financial Risk Management
FX Hedging & Risk Management

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